Homework Answers
| Present value of Perpetuity | $ 300,000 | =1000/(4%/12) |
| ( Month payment / Monthly discount rate ) | ||
| Correct answer is option C . | ||
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Compute the PV of a level-payment perpetuity with monthly payments of $1,000, given an annual discount...
Compute the PV of a growing annuity with an initial monthly payment of $2,500, growing at...
Compute the PV of a growing annuity with an initial monthly payment of $2,500, growing at 4% per year, a 35-year life and an annual discount rate of 6%. Select one: O a. $546,556.02 b. $847,917.43 c. $752,995.47 d. $332,778.24 e. $611,198.33
Dake is receiving a perpetuity due with annual payments. The payments are $1,000 at the beginning...
Dake is receiving a perpetuity due with annual payments. The payments are $1,000 at the beginning of each year except the payment at the beginning of every fifth year is $6,000. In other words, the first four payments at $1,000 with the fifth payment being $6,000. This is followed by four more payments of $1,000 and then a fifth payment of $6,000. This pattern continues forever. Using an annual effective interest rate of 8%. Calculate the present value of this...
A perpetuity has annual payments. The first payment is for $330 and then payments increase by...
A perpetuity has annual payments. The first payment is for $330 and then payments increase by $10 each year until they become level at $600. Find the value of this perpetuity at the time of the first payment using an annual effective interest of 4%. (Round your answer to the nearest cent.)
2) You are given a perpetuity, with annual payments as follows: Payments of 1 at the...
2) You are given a perpetuity, with annual payments as follows: Payments of 1 at the end of the first year and every three years thereafter. Payments of 2 at the end of the second year and every three years thereafter. Payments of 3 at the end of the third year and every three years thereafter. The interest rate is 5% convertible semi-annually. Calculate the present value of this perpetuity. A. 24 B. 29 C. 34 D. 39 E. 47
an increasing perpetuity immediate makes annual payments. the first payment is 100 and each subsequent payment...
an increasing perpetuity immediate makes annual payments. the first payment is 100 and each subsequent payment is larger than the preceding payment by an amount X. based on an annual effective interest rate of 10%, the present value of the perpetuity at time 0 is one half of its present value at time 20. what is rhe value of x?
11. Jeff bought an increasing perpetuity-due with annual payments starting at 5 and increasing by 5...
11. Jeff bought an increasing perpetuity-due with annual payments starting at 5 and increasing by 5 each year until the payment reaches 100. The payments remain at 100 thereafter. The annual effective interest rate is 7.5%. Determine the present value of this perpetuity. A. 700 B. 785 C. 760 D. 735 E. 810
Using a discount rate of 9.6% APR, compounded monthly, calculate the present value of a monthly...
Using a discount rate of 9.6% APR, compounded monthly, calculate the present value of a monthly perpetuity consisting of $5200 payments if: (a) the first payment is made today (2 pts.), (b) the first payment is made one month from now (2 pts.), and (c) the first payment is made 42 months from now (2 pts.).
i really need help with this iu FINS1613 The Perpetuity of Broken Dreams Practice Problem Question 1 The Perpetuity Of Broken Dreams is an investment that pays monthly cash The first payment of $3...
i really need help with this
iu FINS1613 The Perpetuity of Broken Dreams Practice Problem Question 1 The Perpetuity Of Broken Dreams is an investment that pays monthly cash The first payment of $375.00 is due in one month. Payments then grow by 6.0% per month until month 50. The payrnent in month 57 is $423.75, which is 13.0% larger than the original first cash flow of $375.00. Payments then grow again by 6.0% per month until month 112. This...
23. An ordinary annuity is best defined as: A) increasing payments paid for a definitive period o...
23. An ordinary annuity is best defined as: A) increasing payments paid for a definitive period of time. B) increasing payments paid forever C) equal payments paid at the end of regular intervals over a stated time period. D) equal payments paid at the beginning of regular intervals for a limited time period. E) equal payments that occur at set intervals for an unlimited period of time 24. A perpetuity is defined as: A) a limited number of equal payments...
When calculating a growing perpetuity, the growth rate is expected to continue forever. Therefore it should...
When calculating a growing perpetuity, the growth rate is expected to continue forever. Therefore it should not exceed... a. the growth rate of the population in the economy. b. the growth rate of productivity in the economy. c. the growth rate of the general economy (growth in real GDP). d. the return on a large portfolio of stocks from the economy. What is the present value of a growing perpetuity with an expected cash flow of 1,000 next year, a...
Compute the PV of a growing annuity with an initial monthly payment of $2,500, growing at 4% per year, a 35-year life and an annual discount rate of 6%. Select one: O a. $546,556.02 b. $847,917.43 c. $752,995.47 d. $332,778.24 e. $611,198.33
11. Jeff bought an increasing perpetuity-due with annual payments starting at 5 and increasing by 5 each year until the payment reaches 100. The payments remain at 100 thereafter. The annual effective interest rate is 7.5%. Determine the present value of this perpetuity. A. 700 B. 785 C. 760 D. 735 E. 810
i really need help with this
iu FINS1613 The Perpetuity of Broken Dreams Practice Problem Question 1 The Perpetuity Of Broken Dreams is an investment that pays monthly cash The first payment of $375.00 is due in one month. Payments then grow by 6.0% per month until month 50. The payrnent in month 57 is $423.75, which is 13.0% larger than the original first cash flow of $375.00. Payments then grow again by 6.0% per month until month 112. This...
23. An ordinary annuity is best defined as: A) increasing payments paid for a definitive period of time. B) increasing payments paid forever C) equal payments paid at the end of regular intervals over a stated time period. D) equal payments paid at the beginning of regular intervals for a limited time period. E) equal payments that occur at set intervals for an unlimited period of time 24. A perpetuity is defined as: A) a limited number of equal payments...
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